The "colossally bad", "stupid" rhetoric would be justified if the proposal were for the NIH to give away a significant proportion of its budget in prizes: it's

The "colossally bad", "stupid" rhetoric would be justified if the proposal were for the NIH to give away a significant proportion of its budget in prizes: it's reasonably obvious that prizes can't be a mainstay of public research funding. Instead, the proposal is to spend $80 million: about 0.25% of the NSF's present budget, and less than a quarter of the proposed increase in annual NSF funding in the bill. In other words, throw this $80 million into the NSF's general expenditure instead and in future it would be about to fund, oh, maybe about 20.05% of business-as-usual funding requests to pursue tendentious environmental-health correlation findings and non-reproducible treatments for cancer in inbred mice. (Until the supply of these inevitably rose to meet its former "equilibrium" with demand.) If that's the opportunity cost of seeing if prizes can stimulate some successful research which will not otherwise be funded, then it seems like an arguable proposition, especially since prizes like the X-Prize are often claimed to stimulate research spending which is a multiple of the actual prize money awarded. (No doubt that effect would go away if the NSF spent $8 billion in funding through prizes, but nothing like that is being proposed.) No doubt the decision process of awarding the prize would be dysfunctional; but it would be dysfunctional in a different way to the NSF's usual funding mechanisms, increasing the chance that at least one of the two would produce the right outcome in any given case.